Article Number : 4673 |
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| Date | 7/22/2009 8:48:34 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=4673 |
| Abstract | ST LOUIS—Nearly 10 years after purchasing the Rug Décor chain from Shaw Industries, CCA Global Partners has decided to... |
| Article | ST LOUIS—Nearly 10 years after purchasing the Rug Décor chain from Shaw Industries, CCA Global Partners has decided to divest itself of the operation. CCA Global said it entered into a definitive agreement to sell the Rug Decor division to a group led by three of its current Rug Decor franchisees: Rick Ruby, Keith Rhodes and Bob Ellis. The trio currently own a total of six Rug Decor stores and have been members of the franchise group’s advisory council since its inception in 2003. In addition, Scott Hayim, will lead the new Rug Decor Partners (RDP) as CEO and assume an ownership stake. According to the deal, all existing franchise and license agreements will be transferred to RDP, along with the corporate store here. The six stores currently owned by the new group will be operated as corporate stores. Hayim told FCNews the new buying group starts out with a total of 23 franchises of which seven will be corporately owned. There are also four Rug Décor licensed stores. In a press release, CCA stated it divested itself of the rug franchise because “the business is not central to [the company’s] core flooring business or strategy. Rug Decor franchisees will be able to move forward and prosper more rapidly with an ownership group that will provide full-time attention and commitment to the business.” Haymin agreed, noting, “CCA is a tremendous company, but its focus has not been on area rugs per se. We have the experience, the resources and the plan to support individuals and companies interested in developing a [proven] retail area rug business.” Though it is exiting the operation, CCA admits this type of model “continues to be a unique retail format for selling area rugs with significant potential for success.” As for that model, Hayim, explained, “We will continue to run a traditional franchise with a great deal of focus on refining our model based on a more efficient customer presentation and key vendor relationships. We also expect to grow the number of company-owned stores and continue development of a coordinated e- commerce and bricks and mortar strategy.” Despite the recession gripping the county, he added. “We have purchased this franchise with significant growth in mind, but we will not set a specific time line for achieving that end. We believe there is huge opportunity for branded retail area rug locations throughout the U.S., especially if a strong and consistent model is implemented.” As such, Haymin said the ownership group’s first priority is development of a state-of-the-art, efficient, area rug selling model. “We have much of that in place today but expect to spend the first 12 months completing the model. We have some specific plans for refining our model and the way we do business, which will become more clear in the coming months.” While CCA will continue to provide corporate support services to RDP for a period of time after the transaction closes, which is expected at the end of this month, Haymin said the group “expects to have tremendous relationships with our current key vendors, of which there are currently about 15 in the core assortment, and will evaluate other opportunities where they exist.” Though Rug Décor stores vary their product emphasis somewhat depending upon their location, a typical operation is approximately 3,000 square feet and carries the full range of merchandise from machine made to hand-tufted and hand knotted to fully custom. A typical 5 x 8 rug can range from $149 to $2,000 with “the sweet spot at $399 to $599,” he explained. The Rug Décor concept was first started by Shaw in January 1997 at the time the mill was undertaking its retail strategy. It sold the operation, which at the time consisted of eight stores, to CCA on Jan. 1, 2000. For more information on RDP, contact Haymin at 314.506.0062. |